Consumer Watch: Safe Ways to Save Money

As the financial slowdown continues, people watching the markets fall, or doing business with troubled banks are realizing how risky investing can be.

So how can consumers put their money away, without fear of losing it-- and actually make a little off of it? Liz Kennedy explains in today's Consumer Watch.

AS FOLLOWS-- IN THESE TROUBLING FINANCIAL TIMES, PIGGY BANKS AND MATTRESSES SOMETIMES SEEM LIKE THE MOST PRACTICAL PLACES TO SAVE MONEY. BUT THEY'RE NOT.

YOUR MONEY CAN BE SAFE IN BANKS BECAUSE OF THE FEDERAL DEPOSIT INSURANCE CORPORATION -- OR F-D-I-C. THE F-D-I-C GUARANTEES MONEY-- UP TO $100,000 IN AN INDIVIDUAL BANK ACCOUNT-- $250-THOUSAND IN AN IRA.

ONE SAFE ACCOUNT IS A MONEY MARKET DEPOSIT ACCOUNT. CONSUMERS CAN WITHDRAW FROM MONEY MARKET ACCOUNTS AT THEIR BANKS, BUT USUALLY HAVE TO MAINTAIN A MINIMUM MONTHLY BALANCE... AND ARE ALLOWED A LIMITED AMOUNT OF WITHDRAWALS. MONEY MARKETS USUALLY EARN HIGHER INTEREST THAN NORMAL SAVINGS ACCOUNTS.

CERTIFICATES OF DEPOSIT-- OR C-D'S-- ARE ALSO CONSIDERED SAFE. MONEY IN C-D'S IS EXPECTED TO MATURE-- OR REMAIN IN THE ACCOUNT FOR A CERTAIN PERIOD OF TIME.

IF YOU WITHDRAW EARLY YOU WILL PAY A PENALTY. ACCORDING TO BANKRATE-DOT-COM... A WEB SITE THAT ANALYZES FINANCIAL RATE INFORMATION... ON AVERAGE, A ONE-YEAR C-D YIELDS BETWEEN TWO TO FOUR PERCENT.

ANOTHER WAY TO SAVE: U-S TREASURY SECURITIES. THEY ARE NOT INSURED BY THE F-D-I-C, BUT ARE CONSIDERED "LOW RISK" AND BACKED BY THE UNITED STATES GOVERNMENT.

A BOND CAN BE SOLD BEFORE IT MATURES-- BUT, THERE'S A CHANCE YOU CAN LOSE MONEY, DEPENDING ON WHERE INTERESTS HAVE MOVED. FOR CONSUMER WATCH, I'M LIZ KENNEDY.